Suppose Brazil Has a Floating Exchange Rate, and It Faces

question 18

Multiple Choice

Suppose Brazil has a floating exchange rate, and it faces domestic inflation and a trade deficit.Assuming it desires overall balance, if Brazil shrinks its money supply, other things equal one would expect which of the following to occur?

• A) inflation to become more severe and the trade deficit to become less severe, an example of policy agreement
• B) inflation to become more severe and the trade deficit to become more severe, an example of policy conflict
• C) inflation to become less severe and the trade deficit to become less severe, an example of policy agreement
• D) inflation to become less severe and the trade deficit to become more severe, an example of policy conflict

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Definitions:

Communication Process Model

A theoretical framework describing the components and interactions involved in the transmission of messages between a sender and a receiver.

Broadcasting Model

A method of mass communication where information or entertainment content is transmitted from a single source to a wide audience through mediums like television, radio, or the internet.

Motivation

The internal or external driving force that incites individuals to take action, pursue goals, or engage in a task with enthusiasm and diligence.

Audience Reaction

Refers to the responses, whether emotional, cognitive, or behavioral, that individuals or groups display in response to a message, performance, or event.